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Shipping snafu could cause energy crisis along Great Lakes

STAR ON THE HORIZON — The Vista Star passes by the Joseph L. Block in the harbor recently. (Jed Carlson/jcarlson@superiortelegram.com)

Mike Simonson

Wisconsin Public Radio

Shelley Nelson

Superior Telegram

A shortage of coal shipped by rail to power plants in Wisconsin may cause a crisis next winter similar to the propane shortage last winter.

Even as railroad tankers become a pipeline on wheels from the North Dakota Bakken oil field, coal on rail lines from western states like Wyoming and Montana to electric generating plants in the Upper Midwest isn’t keeping pace with need.

Sean Craig, Dairyland Power Cooperative fuel supply manager in La Crosse, said they have a shortage on the ground right now.

“By now we need to build inventory to be prepared for the winter burn,” he said. “The concern that we have is the amount of rail coal being delivered into the terminal is not enough to start building that inventory.”

In three months, Craig said it could become critical. Coal is shipped by rail to the Mississippi River where it is loaded on barges and brought to their Genoa power plant. Once the Mississippi freezes over, the barges stop.

Barron Electric in western Wisconsin buys electricity from Dairyland Power. General Manager Dallas Sloan said the lack of coal could spike prices and bring down supply.

“Reliability that Sean talks about at this point could be a key part of reliability in this whole region if we have another severe winter, Sloan said, adding “it’s kind of similar to it because if we run out of coal just like they ran short of propane, prices probably go up, plants go on idle.”

Midwest Energy Terminal in Superior is experiencing similar issues. The facility provides coal to several power plants along the Great Lakes and St. Lawrence River, including Minnesota Power, is struggling to get supply.

With supplies down by about 1½ million tons, President Fred Shusterich said this is the time of year his customers are stockpiling coal to prepare for the January to March shutdown of the Soo Locks and ice conditions on Lake Superior, conditions that this year persisted into May. Yet the trains that typically bring coal from the west to the Superior waterfront facility are only coming half as often as usual. He said while a typical 123-car rail shipment takes five days to turnaround, it now takes about 10 days to get the shipment.

Minnesota Power spokeswoman Amy Rutledge said they are dealing with coal shipments that have slowed too, but the situation is not critical and their supplies are fine now. They are also working with Burlington Northern.

Superior Water, Light & Power gets electricity from Minnesota Power.

“It’s a disappointing situation we’re all in, and it’s frustrating,” Shusterich said. “But I know the good people locally — and even the railroad is working hard — to get themselves out of it. But it’s going to be the mess that it is … I would be surprised if this is fixed before well into 2015.”

Burlington Northern-Santa Fe said in a statement to WPR that they are investing $5 billion in expanding capacity, hiring more people and adding more locomotives. They say they are focused on “priority issues facing customers.”

“This never should have happened, but it did and there are a lot of people suffering for it,” Shusterich said.

Equipment alone won’t solve the problem unless the railroad is able to improve the turnaround speed, Shusterich said.

This is also getting state and federal attention.

U.S. Senator Tammy Baldwin released a statement saying: “Following last winter’s devastating propane shortage, I am committed to ensuring that Wisconsinites do not face another energy crisis as temperatures drop. My staff and I will continue to work with BNSF, the Surface Transportation Board, and Dairyland Power to find a solution to this looming fuel shortage.”

Sen. Bob Jauch, D-Poplar, and Democratic Reps. Janet Bewley of Ashland, Nick Milroy of South Range and Stephen Smith of Shell Lake also sent a letter to the National Surface Transportation Board in Washington D.C. The state lawmakers urged the federal agency to take immediate steps to increase coal shipments to Midwest utilities to avert an energy crisis similar to the propane shortage last winter.

Wisconsin Public Radio can be heard locally on 91.3 KUWS-FM and online at www.wpr.org.